Few indicators validate physical silver and gold like today’s topic. Not that I need more convincing but a little reassurance never hurts, especially in today’s world. Gold and silver are defying the economic law of supply and demand. This isn’t really a law but guys with bad bow ties like the legalistic sound of economic “law of demand”, so be it. Nevertheless, this anomaly, or oddity, is well worth space on TPS (The Prospector Site) and proves silver/gold are cheap compared to days ahead. With that said, I’m so very glad you’re sharing your precious time with us….thanks.
Below is an interesting chart provided by Zero Hedge (click link to view full article). As of February 2013, demand for gold has soared all while declining in price.
As you can see below the same odd correlation is taking place with silver, too.
TPS readers already know that I pay little attention to short-term silver and gold fluctuation. I only mention it today for those sitting on the PM fence looking for a soft entry or add more metal to a growing stack. The charts above clearly speak for themselves, at least for those living within a realistic mind.
It’s fair to compare early 2013 PM demand to guns and ammo. The same level of demand that leaves gun shelves empty also increases the price of firearms and ammo. But guns and ammo have one huge advantage over silver or gold. Gun makers can hire more hands, lease more space and eventually increase output. The same goes for ammunition as well.
Physical silver or gold are different. No one wants to see increased metal output more than PM brokers or dealers. My conversations with folks in the PM field lead me to believe that most making a nice living selling metal act unworried…. but I have my doubts. Precious metal rationing and interruption should be expected; charts like the two above only validate my opinion.
Does this alone justify dropping everything life related to buy silver or gold? No, not by a long shot. Trading dollars for PM must be part of an overall life-changing decision of self reliance. The decision to buy PM must include how much, from whom, and where to store. The decision to buy is only the first step, regardless the price of today’s silver or gold.
QUESTION: I own my home, cars, and owe no one a penny. A friend turned me on to your site and I have to say your precious metal information is intriguing – but still not convinced buying gold is as beneficial as some believe. Please explain how a holding of gold will help after an economic collapse.
TPS Reply: Thanks for the great question, and reading TPS. Your question is one more and more ask as the word “recovery” sounds less promising with each passing day. The truth is we are not in recovery, we are in economic denial. This denial is what separates so many from the protective nature of silver and gold. Take trillions of borrowed dollars from the equation and watch how fast economic volatility becomes the norm.
First, economic collapse is a misleading term. The collapse you speak of affects those unprepared far more than those living within means and holding wealth stored in safe havens (see video below). Don’t take this as uncaring but a “collapse” will only strengthen the wealth of most holding silver and gold. Honestly, I would enjoy nothing more than watching gold decline to $500 an ounce (this means our economy is recovering, truly recovering), but this will not happen anytime soon.
The word I use is correction. I feel the ill effects of a declining economy will only become obvious to most when it affects them personally. Think back to September/October 2008 as the DOW declined from 14,000 to just over 6000. Those today celebrating the recent DOW high have short memories, you agree? Think back to the housing correction just prior to the DOW correction, too.
People pay attention when wealth disappears and hungry. Then, and only then, will PMs reveal themselves as a true safe haven in an age of great economic uncertainty.
It sounds like you’ve worked hard for what you own. I can tell by your comment that a life of prudence and independence is something you value. Assets like cars, houses, retirement plans, etc could rapidly decline in value as the masses liquidate traditional assets, and toys, to pay for life’s necessities. Wealth stored in silver or gold traditionally benefit in such times of monetary correction.
This is why it’s so important to incorporate PM into an overall plan of self reliance. Not the end of the world but certainly a reshuffle of worldwide wealth. Why not invest in the one asset capable of transporting personal wealth beyond this time of correction? Thanks again for the comment.
WORTH NOTING: Folks, we must keep eye on the overall economic picture here. Rising home values and a rising DOW have nothing to do with recovery. Remember, both significantly corrected soon after Mr. Bernanke and our Congress pronounced both markets safe & sound (2007/08). This illusion of recovery is nothing more than an economy supported by nonstop currency creation and unsustainable over long term. The dollar number next to physical metal is irrelevant. My advice is to step up your plan of protection, soon.
DC Carlton is the founder of The Prospector Site and author of Why Silver and Gold Will Go Higher. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.